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Will The Fed Rescue the Markets?

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  • Description

    Mark Luschini of Janney Montgomery Scott gives his outlook for the markets and Fed.

  • Duration 3:22
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-- is based in part on hopes that the Fed or is our wall.

Keep porn blues and that -- -- but mark bush Cheney doesn't think that the Fed is coming to anybody's rescue any Thompson and especially an election year mark is the chief investment strategist.

With Janney Montgomery Scott Wolf clearly people you we were looking at the tenure earlier mark.

It's still -- the yield is still below 2% that is shocking what anything's gonna change to really get people out of treasuries which could help the stock market.

Well unfortunately I think is going do require probably a shock to the bond market to actually.

Reinforcing people's minds that perhaps bonds are the safe place that seemingly.

And certainly -- long term have held the convention that they are.

But in the meantime -- investors in bonds have been vindicated by these exceptionally low interest -- -- the Fed's checkbook.

And of course are actually we've had a thirty year tail wind in the bond market so.

It's going to require a shock to the bond market I think to encourage people to consider.

Moving away from bonds -- -- mutual funds into equity prices which -- in fort your equity stocks that is.

Which unfortunately -- -- -- continue to believe.

Assets believe -- assets is really incredibly even after -- more than a hundred billion dollars just last year alone.

But is making of a shock in the bond market the Federal Reserve -- even if it's an election year you don't believe that it longer term interest rates start moving up significantly.

The Fed is not gonna stand by let that happen is it.

No I think that.

The the last thing the Fed is wanting to have -- Kerr at the moment is drift higher interest rates which would be counterproductive to their effort to try to stimulate economic activity so.

He additional friction of higher interest rates would work against that effort by the Federal Reserve so.

I think likely they check book war remain handy.

But nonetheless I think deferral rates for.

Is at least unlikely under the current conditions in which we have.

Inflation still running a little bit hotter than their target of 2%.

And in addition to that.

I'll -- you know surprisingly perhaps at this juncture some three years removed from the Great Recession a still laboring employment market.

We do see job growth occurring -- so I think we'd have to either see some threat of deflation or DK and job related activity you'll for the Fed.

May institute further quantitative easing.

We still have nice gains on your major stock market gauges have by the sharing with the down.

At that NASDAQ -- up seven and a half percent mark do you think that run can continue.

That's an awful lot of very quickly and I think -- at this point in time what we're going to need -- basically validate.

The lift and equity prices we've seen really across almost global bourses at this juncture quite evenly.

Is a faster pace of economic growth.

That -- market has moved up basically on multiple expansion which either assumes.

Double digit.

Return and earnings growth later this year and or economic to -- economic growth to support faster earnings growth and at this -- with today's GDP report.

And earnings have been better than expected so far -- are still coming in -- mid single digits.

It doesn't suggest to us that we can continue to see this pace advancement and equity prices mark great to talk.

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